Agency Breaks Rules It Should Enforce, Auditors Say

State rules for contracting, purchasing and personnel are being broken by the very agency that is supposed to enforce those rules, state auditors said Wednesday.

The 110-page audit report on the Department of Administrative Services is the most voluminous, and one of the most critical, issued by the auditors since they took office three years ago.

Robert G. Jaekle, the Republican auditor, said the department was held to a strict standard because of its unique place in state government.

``These are the rules they get other agencies to adhere to,'' he said. ``We're kind of holding them to their own standards.''

The department functions as a central personnel office for most of the executive branch. It also handles data processing, purchasing of goods and services and bill collections. The audit found deficiencies in every area, including some that had been cited in past audits and gone uncorrected.

``There are many of the auditors' conclusions that we disagree with,'' William K. Seymour, a department spokesman, said. ``We think the auditors do not fully appreciate the intricacies of running this agency and streamlining major parts of it.''

He said the agency has taken corrective action where it agreed with the auditors' findings, but ``in other instances, we do not agree with how the auditors determined that a mistake indeed happened.''

The department's comments on the individual findings are included in the report itself. They generally defend the department's conduct, even in cases where the agency agrees that the rules were bent or broken.

For example, one of the most serious violations, according to Jaekle, is allowing outside consultants to work without contracts. The audit cites several instances of contracts' being signed months after work began.

``It's not a good business practice,'' Jaekle said.

But the department said it could not wait for the contracts to be formalized in those cases.

``Important work could not be suspended,'' the agency said.

Jaekle said that practice opens the state to claims for payment for services it did not want, or for services that fell short of expectations.

The department said its review of the contracts cited in the audit show the state got what it paid for in each instance. Jaekle said that's no excuse for such a risky practice.

The department also said it ``has taken steps to ensure that there are no recurrences of these type violations,'' although that may prove a tall order. The agency has been cited repeatedly in the past for the same problem.

The audit also cited the department for:

* Executing a no-bid contract with a management consultant without showing he was the ``sole source'' for the service, as required for exemption from bidding rules. The department said the sole- source documentation was lost.

* Paying contractors without documentation of services performed. The department said the documentation was in order when it came in.

* Allowing employees to take more than five consecutive days of sick leave without a written medical excuse.

* Approving a workers' compensation claim by an employee of the agency's workers' compensation unit based soley on information from that employee. The claim was later deemed invalid because the injury was not work-related. The agency blamed the problem on a mistake by a private contractor who processes the claims.

* Paying professional and management-level salaries to employees who don't do the professional or managerial work described in their job classifications. The department agreed that the duties did not conform to the job descriptions, although it did not agree that all the employees were overpaid.

* Failing to take full advantage of cash discounts for prompt payment of suppliers, in part because of flaws in the bidding regulations. The agency has amended the regulations.

* Repairing state cars at state expense even when the damage is caused by another motorist, whose insurance company should reimburse the state. The department said it is improving its procedures for pursuing such claims.

* Allowing new cars to sit idle while their warranties expired because no contractor could be found to convert them to natural gas, as state law requires for 10 percent of cars added to the fleet. The department has stopped waiting for the conversions and is using the cars. It may ask the legislature to repeal or amend the law.

* Granting $8,000 intended for state employee wellness programs to Riverfront Recapture to finance a road race open to the public. The auditors said this was a misuse of the money, and the department said it would not happen again.

* Abusing the job classification of ``durational project manager,'' which is supposed to allow for filling temporary jobs without competitive exams, but has become a vehicle for circumventing the merit system. The auditors found ``numerous instances'' of permanent jobs being filled this way. The department disagreed, saying the jobs met the statutory requirements.

* Keeping $1.8 million in a Bureau of Collections Services checking account that earned no interest. The balance has since been reduced.

* Failing to investigate reports that people who owe the state money, such as past welfare payments, have obtained jobs and can now afford to pay.